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  • FIRST POST
    • TUVOK
    • By TUVOK 9th Aug 18, 9:44 AM
    • 38Posts
    • 3Thanks
    TUVOK
    Market reduction.
    • #1
    • 9th Aug 18, 9:44 AM
    Market reduction. 9th Aug 18 at 9:44 AM
    A market reduction as always will happen some time in the future, what level of assets will investors be keeping in non stocks/shares IT's etc
    Will it be in the form of just cash or what other type's of savings?
Page 1
    • dunstonh
    • By dunstonh 9th Aug 18, 10:04 AM
    • 95,371 Posts
    • 63,000 Thanks
    dunstonh
    • #2
    • 9th Aug 18, 10:04 AM
    • #2
    • 9th Aug 18, 10:04 AM
    A crash/decline is always coming. Doesn't matter where you are in the cycle. If you start trying to time the market then you will usually end up with lower returns than just punching through it.

    Your cash held should reflect your short-term and immediate years along with your investment risk profile (not forgetting inflation risk/shortfall risk when considering risks). It really shouldnt be affected by market falls or opinions about market falls.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bowlhead99
    • By bowlhead99 9th Aug 18, 10:10 AM
    • 8,282 Posts
    • 15,132 Thanks
    bowlhead99
    • #3
    • 9th Aug 18, 10:10 AM
    • #3
    • 9th Aug 18, 10:10 AM
    A market reduction as always will happen some time in the future, what level of assets will investors be keeping in non stocks/shares IT's etc
    Originally posted by TUVOK
    As you say, a market reduction will as always happen some time, and we don't know when. So the level of investments in investment funds/ ITs and in non-financial assets etc., that someone might have, can be broadly similar over time. We always know markets will go up and down so a portfolio should be able to withstand the ups and downs without panicking its owner.
    Will it be in the form of just cash or what other type's of savings?
    I think I've just about recovered enough from the pain of reading that apostrophe to be able to say that most of my investments are in funds or ITs or ETFs or investment companies or VCTs, with some self-selected ordinary shares, preference shares or bonds.

    I also have a small amount of p2p and EIS investment, some cash, shares in my employer, and a mortgaged property which I live in, together with other misc non-financial assets such as my car and some watches or wines which could be sold in a pinch (though likely they would be down in value if equity markets were down).

    The collective investments cover a wide range of underlying holdings including equities in developed and emerging and frontier markets, large and small companies, public and private, broad range of countries and industry sectors, bonds issued by companies and governments globally (some index-linked), commercial real estate, infrastructure projects, commodities, hedge /absolute return, etc. Some of the funds are quite specialist and others more generalist.

    As to percentage or amounts, that will be different for everyone because we all have different circumstances and views.
    • bostonerimus
    • By bostonerimus 9th Aug 18, 1:59 PM
    • 2,366 Posts
    • 1,670 Thanks
    bostonerimus
    • #4
    • 9th Aug 18, 1:59 PM
    • #4
    • 9th Aug 18, 1:59 PM
    For people accumulating wealth a market reduction is a chance to buy equities cheaply. You should rebalance to keep your asset allocation constant and redouble your commitment to saving and investing while you have wage income.

    Retired people have a tougher time when markets fall....at least psychologically. They need to use their cash allocation and short term bonds to ride out the downturns, but should also look to do some rebalancing if spending isn't getting them all the way there.
    Misanthrope in search of similar for mutual loathing
    • username12345678
    • By username12345678 9th Aug 18, 6:52 PM
    • 227 Posts
    • 118 Thanks
    username12345678
    • #5
    • 9th Aug 18, 6:52 PM
    • #5
    • 9th Aug 18, 6:52 PM
    I'm out of the accumulation phase but still have 10-15 years before I start drawing down.

    If I was a robot untroubled by market movements i'd be carrying a much heavier weighting of equities.

    I'm not so i've structured my SIPP to allow me to sleep at night.
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